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The date of record is the date that determines which shareholders receive dividend payments. On the day a company declares dividends (the declaration date), it decides on both a date of record and a date of payment. An investor must be listed as the "holder of record" in the firm's stock ledger on the date of record to receive dividends on the date of payment. After the date of record is fixed, an ex-dividend date is determined by stock exchanges or the National Association of Securities Dealers. The ex-dividend date is usually two business days before the date of record. If an investor purchases a stock on its ex-dividend date or after, the investor does not receive the next dividend payment; instead, the seller is deemed the holder on the date of record and receives payment. Companies also use the date of record to decide who receives financial reports and other key information. A company makes no accounting entry on the date of record: its obligation to pay a dividend remain the same on the date of record as before. |
